One of history’s most powerful global corporations, the East India Company (EIC) was founded by royal charter in 1600, and awarded monopoly over all English trade in Asia and the Pacific. One of its major sources of profit was Indian textiles. But the company’s interests stretched far beyond trading – over the next 250 years, it became the major imperial power on the Indian subcontinent. With the help of its large private army, the EIC acquired multiple territories including Bengal, Orissa and Bihar. Concerns about the EIC’s corrupt and monopolistic regime culminated in the Indian Rebellion of 1857–58, after which its powers were transferred to the British state.


Ellie Cawthorne: Your new book charts the “relentless rise” of the East India Company. What made this corporation unique?

William Dalrymple: From the time that it was established in 1600 to its dismembering in 1858, the East India Company transformed from a normal trading corporation to an imperial behemoth. Over a relatively short period of time, the most bizarre thing happened – a single London corporation took over the Mughal empire. This was a corporation with an army of 260,000 people that could topple kings, conquer land, or forcibly expel people from land that it wanted to use.

From one angle, this is a story of colonial oppression. But if you consider that the people actually doing the conquest were not the British government operating out of Whitehall, but a private company operating out of a single London office in Leadenhall Street, it all looks completely different. Suddenly it also becomes a corporate story – one of asset-stripping and plunder, corporate violence and corporate irresponsibility. In fact, many of the concerns we have today about the danger of unregulated corporations first reared their heads with the EIC.

How was the company formed?

At the heart of it all was a group of ruthless, determined traders. Many were ex-Caribbean privateers who’d captured Spanish treasure ships under Drake; in modern parlance, pirates. But if you look at the list of the first subscribers to the EIC, you find a whole range of lower-middle-class London tradesmen investing small sums. As well as sailors, there were wine-sellers, leather workers, cloth merchants and haberdashers.

The original intention was to take on Dutch spice traders in Indonesia. But the Dutch were much better equipped, and so from around the 1620s, EIC traders turned to plan B – Indian textiles. This was a massive business – India was producing spectacular amounts of the world’s finest textiles and flooding markets in far-flung places. Once the EIC jumped on board the textile trade, it mutated from a small fish playing catch-up with the Dutch big boys to the major player – the most sophisticated capitalist organisation in the world.

Why do you think the EIC was able to become more powerful than any company that had gone before?

It was a joint-stock corporation, which was something entirely new at the time – they were an Elizabethan invention. This new model presented exciting opportunities, because for the first time, it allowed people to become non-executive shareholders. Anyone with some spare cash could invest it in a company, without having any involvement in the running of the business. That suddenly opened up enormous inflows of money. And trading voyages relied on huge sums because they were a massive risk – the equivalent today would be Elon Musk’s spacecraft. Even if the voyage was successful, it would take a long time to recoup your money. You could send six ships off to India, full of cannon and sailors, and even if the voyage was a fantastic success, you might not see your money back for a decade.

When EIC agents first arrived in India, what did they find?

They were landing in the richest empire in the world. At this point, India was dominated by the Mughals. It was an incredibly well-run, sophisticated empire, and controlled a quarter of the world’s manufacturers. Britain, in comparison, had a measly 3 per cent.

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The British were dazzled, they’d never seen anything like it. While they were these slightly crude characters stumbling around in codpieces, the Mughals were gorgeous figures swathed in silks. The English diplomat Sir Thomas Roe described Mughal emperor Jahangir as literally fettered in gold, dripping with diamonds.

But despite all its sophistication, in the mid-18th century, the Mughal empire began to collapse. It fragmented into small regional units, which the company realised it could hoover up one by one. While the British had formerly been powerless to take on the Mughals, by that point, a military revolution had taken place in Europe. The bayonet and musket had replaced the pike, and file-firing infantry and mobile artillery had first emerged. These innovations created modes of warfare which, when exported to India, suddenly changed the balance of power.

It became clear that profits could come not only in the form of cash, but also chunks of territory. Beginning in the 1740s, trading companies began to transform into mercenary military units. They were still buying and selling textiles, but at the same time, they were deploying this new type of infantry warfare, and training up Indian troops (sepoys) in mobile horse artillery. With this new technology, they could make mincemeat of vast armies of heavy Indian cavalry.

Was this military edge the key to the EIC’s unstoppable rise?

It was certainly one important aspect, but another was its strong economic model. The company really understood finance and quickly found active and enthusiastic collaboration from Indian financiers. At crucial moments when the company was under threat, it was saved by massive loans from Indian bankers who knew that the EIC, however ruthless and predatory it may have been, respected basic business law. If an Indian banker loaned to a Maratha warlord, he could beg and plead but ultimately, he had no guarantee that he’d get his money back. But if he made a deal with the East India Company, he could legally enforce his claim. In the end, it was having the military edge as well as having a consistent cashflow that always kept the company ahead.

How much backing did the EIC get from the British state?

Throughout this period, the British in India had a big rivalry with the French, who had bases at Pondicherry and Bengal. And every time conflict broke out, the crown voted to send fleets to protect the company. Around a quarter of MPs owned shares in the East India Company and they didn’t want to lose their investments. So although Calcutta, Bombay and Madras were privately owned trading stations, they were protected by the Royal Navy, paid for by the crown and British taxpayers. In 1757, when the British army defeated the French in Chandernagore, it was state troops who did the fighting. Naturally you’d assume the winnings would go back to the crown, but in fact, they went back to the company.

Large sums of money were expended to compel the state to intervene on behalf of the shareholders. As early as 1624, the company was held up for illegal lobbying and bribing parliamentarians, and there was a very corrupt nexus whereby shareholder MPs voted for measures that lined their own pockets. This meant that (as is the case with so many corporations today) the interests of the corporation became the interests of the state.

Did these underhand activities ever threaten to undermine the interests of parliament?

The company definitely competed with the British state at various points. But they were happy to play it both ways. When they were under threat from the French, it was a British organisation that needed protecting by the government. But once the war was won and land had been conquered, suddenly the company said: “This is ours, not yours – hands off.”

Like with so many other corporations, such as Lehman Brothers, while the EIC appeared to be a giant at one moment, the next it could be extremely weak. Many back in Britain were worried that the company could even sink the country’s entire economy, in the same way as we’ve seen recently with Iceland. In the early 1770s, the profits of the company went off a cliff – the share price was wiped out, and the company found itself a million pounds in debt. They went cap in hand to the Bank of England, requesting a vast loan. But the bank quite simply didn’t have enough money to pay out. Edmund Burke warned parliament that, like a viper at the breast, the EIC would kill the country that nurtured it.

As early as 1624, the EIC was held up for bribery and illegal lobbying. Shareholder MPs voted for measures that lined their own pockets

The debate over who should be running the colony raged throughout the 18th and the early 19th centuries. In the end, it was the nation state that triumphed. In 1857, the company screwed up so badly that the Indian Rebellion broke out – a million died in the warfare that followed and the country was left a smoking ruin. This was the point at which parliament finally had enough and nationalised the company. The East India Company Navy was disbanded, and the East India Company Army absorbed into the British Army.

How devastating was the company’s exploitation of India?

Here, for the first time in world history, you see something that we’re familiar with today: corporations’ potential for sheer heartlessness. The EIC operated purely for shareholders’ profit – it wasn’t there to win votes or help people when things went wrong.

One example of this was the Bengal famine of 1770. Bengal had previously been the bread basket of India, but it had literally been asset-stripped by the company. Even during the famine, sepoys were sent out to keep revenue taxes up to their normal level. Even if they were starving, people would have to sell their livestock or homes, or children, in order to pay the taxes the company demanded. Not one penny was remitted. Elsewhere in India there was famine too, but rulers intervened to provide soup kitchens and relief measures. But in Bengal, the company did nothing; it just watched people starve. Profits were kept up, but at the cost of one fifth of all Bengalis dying.

What lessons does this story hold about the relationship between big business and political power?

It’s a parable about how violent, ruthless, exploitative and extractive a powerful corporation can become if unregulated.

Even in the 19th century, everyone in Britain knew that governing a country out of a boardroom 6,000 miles away with no requirement to consider the long-term wellbeing of the people or the land, was no way to run things. And yet why did it remain the case for so long? Because people in power were making massive profits.

In an era when the world is being run by a corporate mogul out of the White House, the history of the East India Company has never been more timely. The story of how a single corporation managed to conquer a state and enslave a people is one that needs to be heard.

William Dalrymple is an award-winning writer and historian based in India. His previous books include Koh-i-Noor: The History of the World’s Most Infamous Diamond, co-authored with Anita Anand (Bloomsbury, 2017); Return of a King: The Battle for Afghanistan (Bloomsbury, 2014); and The Last Mughal: The Eclipse of a Dynasty, Delhi 1857 (Bloomsbury, 2006). The Anarchy: The Relentless Rise of the East India Company (Bloomsbury, 2019).


This article was first published in the November 2019 edition of BBC History Magazine